I have 5 users and the server edition of FogBugz was the way to go. We had used BaseCamp for a year prior, without success. Cost-wise:
$50 Basecamp version = $600/year
FogBugz Server 5 users (@ $200/ea) = $1000 upfront
Depending on the # of users, and if you can afford the upfront investment, the server edition of FogBugz will pay for itself over time compared to other hosted services.
Setting deadlines, time tracking, and project discussion were among our top priorities. FogBugz may seem intimidating, but you'll dive right in and feel like an expert user in an hour. It's as easy as e-mail, and now they have great plugins like Clark Kent (for time reports aka billing) and Balsamiq (my favorite wireframing tool).
Another great feature--our customers email their support requests to an address that goes into fogbugz and assigns a case to the appropriate person. We can assign the case throughout the team and maintain a full history in the case. Then all the customer's cases can be used for billing if necessary.